Newspaper jobs in jeopardy after Journal Register Co. cuts back

Amy Cooknick

A 10-state newspaper chain faces serious changes following its latest bankruptcy plea. The Journal Register Co., owner of the Morning Journal in Lorain and the News-Herald in Willoughby, may shift publication from print to online starting in April, as the result of new ownership.

An affiliate of Alden Global Capital, a New York-based hedge fund, is in the process of purchasing the two papers for $120 million. The Journal Register agreed to the sale after filing for bankruptcy in September 2012 for the second time in three years.

Dennis Hetzel, executive director of the Ohio Newspaper Association, said the new ownership does not necessarily mean that the Morning Journal and the News-Herald will continue to operate at their former capacity.

“My understanding of this is that it’s a very complicated legal process that the Journal Register Co. is going through and my hope is that when the dust settles, these two newspapers will continue to publish and serve their communities,” Hetzel said.

The restructuring could come with the cost of 217 employees between the two newspapers. The Journal Register’s new owner, 21st CMH Acquisition Co., stated in a letter to employees in February, that the company plans to rehire select employees following the sale closure April 17.

According to a notice filed with the Ohio Department of Job and Family Services, those employees in danger of layoffs include two executives, 53 newsroom employees and 162 other employees.

In a February press release, the Journal Register referred to cutting those employees as an attempt to offset growing expenses and declines in print advertising.

Rick Edmonds, media business analyst for The Poynter Institute, said it is not uncommon in today’s news industry to see newspapers cut back or sold to save money, but that doesn’t mean the industry as a whole is in danger.

“It’s absolutely the case that the newspaper business has gotten very difficult,” Edmonds said. “A lot of papers are much smaller than they used to be, but in fact, relatively few midsize and larger papers have actually closed.”

Despite the predicaments of the Morning Journal and the News-Herald, there is still hope for the Northeast Ohio newspaper industry, Hetzel said.

“There [are] a lot of locally owned newspapers in Ohio that are continuing to do well and aren’t in that kind of financial situation, so you almost have to look case-by-case,” Hetzel said. “There’s no question that our industry, like a lot of industries faces some challenges moving forward into the digital age and everyone is trying to figure out what that future looks like.”

Edmonds said that the Journal Register is a special case in the industry, having entered into bankruptcy, come out of it, and fallen into a second bankruptcy. Selling certain smaller papers is likely a strategic move to save other investments.

“I think the Journal Register is among companies that feel they need to develop some new businesses and, in some ways, invest in things now that may not pay off for a few years,” Edmonds said. “It really just frees up whatever money they were losing so that they can invest some in the remaining ventures.”

In addition to the Morning Journal and the News-Herald, the Journal Register Co. plans to sell assets in 10 other states by the April 17 deadline.

Contact Amy Cooknick at [email protected].